Financial illiteracy drags down retirement confidence

A national survey of over 1,500 Australians aged over 60 has cited the lack of financial education and resources for those approaching or already in retirement as a key impediment to retirement happiness and confidence.

The results of the second annual Challenger Retirement Happiness Index indicated that while 74 per cent of the 1,633 individuals surveyed said better financial education would go a long way to improving their happiness, 51 per cent said they were not aware of the resources that are available to plan for retirement and 20 per cent said they were not sure where to even start.

While the overarching happiness score delivered by the index for 2025 was 69 (only one point down from last year), the retiree and pre-retiree split showed a different picture; retirees were happier with a score of 70 this year, compared to pre-retirees at 66.

Cost of living pressures and their impacts on financial security were felt by both pre-retirees (76 per cent) and all Australians surveyed over the age of 60 (72 per cent).

“Ask a happy retiree what brings them joy, and they won’t just talk about their super balance,” Challenger Chief Executive, Customer, Mandy Mannix, said.

“They’ll talk about the coffee catchups, the morning walks, and the holidays they have planned to visit family or see the world. The little things make a big difference – which is why activities and purpose are so important.”

“When we asked Australians over 60 what made them happy, three things stood out: good physical health (59%), enough money to enjoy life (41%), and good mental health (38%).”

Polled Australians over the age of 60 who engaged with financial advice were happier (74) than those who didn’t have a financial adviser (64), with women also noted as quite a vulnerable group when it comes to retirement confidence. More than one-third (34 per cent) of women aged over 60 were extremely or very worried about running out of savings, compared to only 20 per cent of men in the same age segment.

Similarly, unadvised Australians were also significantly more likely to be extremely or very worried about outliving their retirement savings (35 per cent, compared to 19 per cent of advised Australians). Over 90 per cent of Australians polled without a financial adviser also indicated that free, basic retirement education would help to boost financial literacy, financial security, retirement confidence and retirement happiness.

“We know retirement can be one of the most rewarding stages of life—but confidence is key,” Mannix said.

“When people feel uncertain about their finances, they tend to hold back. That’s led to a chronic underspending problem in retirement, with many Australians living more cautiously than they need to.

“Retirees go from a steady pay cheque to a lump sum, and that sudden shift makes it hard to budget with confidence. That’s why a guaranteed, regular income for life is so powerful—it replaces that pay cheque, can keep up with inflation, and gives retirees the freedom to actually live their best life in retirement.

“Retirement confidence isn’t just peace of mind—it’s quality of life. When people feel financially secure, they spend, plan, and live without that worry. That’s why guaranteed regular income matters, and why Challenger is committed to helping retirees feel secure for a better future.”